Estimate your potential SBA 7(a) loan payments and understand key loan terms.
Monthly Payment:
Total Principal Paid:
Total Interest Paid:
Total SBA Fee:
Total Amount Repaid:
Understanding the SBA 7(a) Loan Calculator
The Small Business Administration (SBA) 7(a) loan program is the SBA's primary business loan program. It's a versatile loan that can be used for a variety of general business purposes, including:
Starting a business
Expanding an existing business
Purchasing a business
Refinancing existing debt
Purchasing equipment or real estate
Working capital
This calculator is designed to provide an estimate of your monthly payments, total interest paid, and the associated SBA guarantee fee for a 7(a) loan. It helps potential borrowers understand the financial implications of taking out an SBA 7(a) loan.
How the Calculation Works:
The calculator uses standard financial formulas to estimate your loan's cost. Here's a breakdown:
1. Monthly Loan Payment Calculation:
The core of the calculation is the loan payment formula, which determines your fixed monthly principal and interest payment. The formula is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
M = Your total monthly mortgage payment (principal and interest)
P = The principal loan amount (Loan Amount)
i = Your monthly interest rate (Annual Interest Rate / 12 / 100)
n = The total number of payments over the loan's lifetime (Loan Term in Years * 12)
2. Total Interest Paid:
This is calculated by subtracting the total principal repaid from the total amount paid over the life of the loan.
Total Interest Paid = (Monthly Payment * Total Number of Payments) – Loan Amount
3. Total SBA Guarantee Fee:
The SBA charges a guarantee fee, which is a percentage of the guaranteed portion of the loan. The fee structure can vary, but for the 7(a) program, it's typically calculated as follows:
Note: This calculation provides an estimate. Actual SBA fees can vary based on the loan amount and the specific SBA policy at the time of application. For larger loans, the percentage may decrease for amounts over certain thresholds. Always confirm the exact fee with your lender.
4. Total Amount Repaid:
This is the sum of all payments made throughout the loan term, including principal, interest, and the SBA guarantee fee.
Total Amount Repaid = (Monthly Payment * Total Number of Payments) + Total SBA Fee
Using the SBA 7(a) Loan Calculator:
Loan Amount: Enter the total amount you wish to borrow.
Annual Interest Rate: Input the estimated annual interest rate for the loan. SBA loan rates are often competitive.
Loan Term (Years): Specify the desired repayment period in years. SBA 7(a) loans typically have terms of up to 10 years for working capital and equipment, and up to 25 years for real estate.
SBA Guarantee Fee (%): Enter the estimated SBA guarantee fee percentage. This is a crucial component of the loan cost.
Calculate: Click the "Calculate" button to see the estimated monthly payment and total costs.
Important Considerations:
Estimates Only: This calculator provides an estimate. Actual loan terms, interest rates, fees, and payments will be determined by the SBA-approved lender based on your business's financial profile and creditworthiness.
Lender Fees: In addition to the SBA guarantee fee, lenders may charge origination fees, servicing fees, and other costs. These are not included in this calculator.
SBA Guarantee Fee Variations: The SBA guarantee fee is subject to change and can vary based on the loan amount. Check the SBA website or consult with a lender for the most current fee schedule.
Credit Score: A strong credit history is vital for SBA loan approval and securing favorable terms.
Collateral: SBA loans may require collateral depending on the loan amount and purpose.
By using this tool, you can gain a clearer perspective on the financial commitments associated with an SBA 7(a) loan, aiding in your business planning and decision-making process.
function calculateSbaLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var sbaFeePercentage = parseFloat(document.getElementById("sbaFeePercentage").value);
var resultDiv = document.getElementById("result");
// Validate inputs
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(interestRate) || interestRate < 0 ||
isNaN(loanTerm) || loanTerm <= 0 ||
isNaN(sbaFeePercentage) || sbaFeePercentage 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle zero interest rate scenario
monthlyPayment = loanAmount / numberOfPayments;
}
// Calculate total interest paid
var totalPaymentsMade = monthlyPayment * numberOfPayments;
totalInterestPaid = totalPaymentsMade – loanAmount;
// Calculate SBA guarantee fee
totalSbaFee = loanAmount * (sbaFeePercentage / 100);
// Calculate total amount repaid
totalAmountRepaid = totalPaymentsMade + totalSbaFee;
// Format numbers for display
var formattedMonthlyPayment = monthlyPayment.toFixed(2);
var formattedTotalPrincipal = loanAmount.toFixed(2);
var formattedTotalInterest = totalInterestPaid.toFixed(2);
var formattedTotalSbaFee = totalSbaFee.toFixed(2);
var formattedTotalAmountRepaid = totalAmountRepaid.toFixed(2);
// Ensure no negative interest is displayed due to floating point inaccuracies
if (parseFloat(formattedTotalInterest) < 0) {
formattedTotalInterest = "0.00";
}
document.getElementById("monthlyPayment").innerText = "$" + formattedMonthlyPayment;
document.getElementById("totalPrincipal").innerText = "$" + formattedTotalPrincipal;
document.getElementById("totalInterest").innerText = "$" + formattedTotalInterest;
document.getElementById("totalSbaFee").innerText = "$" + formattedTotalSbaFee;
document.getElementById("totalAmountRepaid").innerText = "$" + formattedTotalAmountRepaid;
resultDiv.style.display = 'block';
}